After more than a year in which both Obama and Netanyahu have been in office, the truly minuscule movement of resuming indirect peace talks is currently the only achievement on the peace front. Whose fault is this? The Middle East has been prone to an endless blame game. The Palestinians accuse Israel of not wanting peace, and justifiably point to the proliferation of settlements in the West Bank. Israeli commentators point out that the Palestinians have opted out every time Israel proposes something that they should accept, as in the Taba Summit of 2001 and during Olmert's talks with Abu Mazen (Mahmoud Abbas).

This discussion does not only take place between Palestinians and Israelis, but also inside Israel. There are the commentators like Akiva Eldar and Gideon Levy who consistently argue that Israel has misrepresented its offers; that Ehud Barak's 'There is no Partner' line from the year 2000 covers up the truth that Israel never made viable offers. Then again there are commentators like Nachum Barnea and Ehud Yaari, who, in his recent article in Foreign Affairs, argue that the Palestinians don't really want a state, and that they are actually waiting for the moment where they can, as he puts it, 'fall into Israel's arms,' dismantle the Palestinian Authority and force a binational state on Israel, thus ending the possibility of Israel's being a Jewish and democratic state.

The situation reminds me of Akira Kurosawa's classic film Rashomon, in which the same event is recounted from a number of perspectives leading up to the point where it is unclear whether the event, a murder, really happened. Listening to the various accounts of the Middle East peace process, it is easy to become confused. I believe that the reason for this is primarily that all sides involved want a simplistic picture of reality. More than anything, all sides want a morally simplistic picture: either Israel is the clear-cut bad guy in the story; a cunning regional superpower with colonial ambitions hidden behind pretexts about Israel's security; or: Arabs have never accepted Israel, and are doing everything to undermine its existence.

The truth, I suspect, is more complicated than the aficionados of moral simplicity would like. We should remember how long it generally takes for states to find their identity. Most European nation states went through major wars, whether civil or against foreign powers, in the process of welding an identity. And none of them turned into modern democracies easily or quickly. The same holds true for the U.S.A., a country that began as a democracy that put human rights, the separation of church and state into its immortal constitution. And yet the South of the U.S. continued to practice slavery until the civil war, and segregation was abolished only after the mid-twentieth century.

Israel is in the throes of a battle about its identity. There are indeed large groups that want it to be something more resembling a theocracy than a democracy; there are other groups that go further than that: they think in Messianic terms and believe that Israel should not be afraid of the possibility of apocalyptic war, because they are convinced that God will then personally intervene in history - and they are fervently backed by large Christian fundamentalist groups in the U.S.

The same holds true for the Palestinians: large factions in Hamas want Palestine to be a theocracy governed by Sharia law; and Hamas, to this day, is not willing to accept Israel's existence. The conflict within the Palestinian camp has reached the point where there is no longer a single representative government that unifies Gaza and the West Bank.

By and large, I believe that most Israelis and most Palestinians are striving for peace. This is reflected in the consistent majority support for the two-state solution on both sides. But there is a deep reason why these majorities cannot impose their will and move towards the two-state solution. Somehow, the theological unconscious of the Middle East keeps interfering; somehow the belief that there is one, divinely sanctioned, absolute truth about reality that is held by one of the monotheistic religions keeps popping up. Rabin's assassination by a fundamentalist fanatic is symbolic of this intrusion of the theological domain into politics.

Does this mean that the peace talks due to start now are doomed to failure? They are, as long as the U.S. and the international community continue to believe that a final status agreement and the end of the conflict are in sight, and just a matter of smart negotiating tactics. As I have argued in the past, this is based on a mistaken conception of the nature of the conflict.

It seems that we need to accept that a final peace agreement is currently an unrealistic goal. Each side is accusing the others: in the Palestinian Prime Minister Salaam Fayyad claims that Israel doesn't want it; Ehud Yaari claims that Palestinians don't want it because they think they can ultimately get the whole of Palestine. The realistic position has been taken both by Fayaad, by commentators like Yaari, and by politicians like Kadima's Shaul Mofaz, who endorsed it a few months ago.

A Palestinian state should be established with temporary borders. The conditions are that even within the temporary borders this state should be viable, have territorial contiguity and should liberate the Palestinians from daily interference in their lives by Israeli security forces. At the same time, it should take care of Israel's security concerns, probably, as Yaari has argued, by involving international security forces.

This may create the conditions for what I have recently called "therapeutic diplomacy", in which both sides could go through the emotional process of gradually coming to terms with the reality of the two-state solution, and arrive at a final status agreement and peace.

But even this modest, skeptical and realistic approach should not blind us to one simple fact: Israel will not be able to continue its policy of dispossession on Palestinian land, whether in East Jerusalem or other areas of the West-Bank. This is morally unacceptable and politically catastrophic. Commentators from Israel's left and the right keep warning that Israel's status in the world is worse than it ever was. And while the right's insistence that some forms of anti-Zionism are a fashionable cachet for anti-Semitic motivations is, in some cases, justified, most of the decline in Israel's standing is of its own making, with Avigdor Lieberman and Danny Ayalon leading the way. Eli Yishai is working hard to contribute, and he has done so effectively with his announcement for new building projects in East Jerusalem, eve as U.S. Vice President Joe Biden is in Israel to jump start peace negotiations. With actions of this sort, it doesn't take anti-Semitism to ruin our relations with the world ? including the U.S: - our government is doing this quite effectively itself.

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